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Friday, August 3, 2018

Why I’m Pro-Market AND Pro-Business

I love businesses because they treat me the way I like to be treated.


Both economists and libertarians often emphatically state, “I’m not pro-business. I’m pro-market.” What does this slogan really mean?

These policies help some businesses, but they’re a burden on the rest.

Sometimes, they’re just saying, “I oppose mandatory cartels, bailouts, subsidies, protectionism, licensing, and other government intervention on behalf of politically-favored firms.” This is a perfectly sensible position. But why anyone would call such favoritism “pro-business”? Sure, these policies help some businesses, but they’re a burden on the rest. If you put a tariff on steel, you hurt domestic businesses that use steel. If you subsidize steel, you hurt businesses that make substitutes for steel. If you bail-out the steel industry, other businesses will ultimately bear much of the cost.

Often, though, the “pro-market, not pro-business” slogan is more about attitude than policy. It’s a quick way to announce, “I don’t favor markets because I like business people. Contra Ayn Rand, they’re no heroes. Indeed, I’m quite suspicious of their motives. I favor markets because competition makes greedy, amoral businesspeople toil for the social good.”

This is a coherent position. But on reflection, it is deeply misguided. Yes, businesspeople are flawed human beings. But they are the least-flawed major segment of society. If any such segment deserves our admiration, gratitude, and sympathy, it is businesspeople. We should be pro-market and pro-business.

Left to our own economic devices, most of us are virtually useless; we don’t know how to produce much, and we don’t know how to find customers.

Why, you ask? My prima facie case begins with this basic fact: Businesses produce and deliver virtually all of the wonderful, affordable products that we enjoy. Contrary to millennia of economic illiterates, businesses rarely do so by “exploiting” their workers. Instead, businesses provide gentle but much-needed leadership. Left to our own economic devices, most of us are virtually useless; we don’t know how to produce much, and we don’t know how to find customers. Business people solve these problems: They recruit workers, organize them to vastly raise their productivity, then put these products in the hands of customers all over the world. Yes, they’re largely in it for the money; but—unlike every government on Earth—business rarely puts a gun to your head. Businesses assemble teams of volunteers to meet the needs of willing consumers—and succeed wildly.

But doesn’t every business benefit from some act of government favoritism? Sure, but who doesn’t? Before you dismiss anyone as a parasite, look at their net contribution—the difference between the government benefits they receive and the taxes they pay. I’m amazed by the chutzpah of professors at public universities who sneer at Walmart for negotiating with local governments for tax breaks. Walmart gets a modest discount from a government monopoly. You, professors, enjoy tax-funded dream jobs for life!

We should remember the many businesses that push in the direction of freedom.

Complaints about government favoritism carry a lot more weight, I’ll admit, when businesses are close accomplices of the politicians who are handing out the favors. The defense industry bears no small part of the blame for the bloated defense budget; the health industry bears no small part of the blame for Medicare and Medicaid. But we should remember the many businesses that push in the direction of freedom. Imagine how hard it would be to build housing if the construction industry weren’t constantly lobbying for permission to build. Imagine how little immigration there would be if employers weren’t constantly lobbying for permission to hire. Populists may seethe with rage when business thwarts the will of the nativist, NIMBY majority, but economists and libertarians should cheer.

To their credit, both economists and libertarians routinely acknowledge that businesses provide good customer service. After all, firms have to protect their reputations. But this gives businesses too little credit. I love businesses because they treat me the way I like to be treated. When businesses want me to buy their products, they almost never nag, shame, preach, condescend, or troll. They make offers, politely say “If you have any questions, you can reach me here”—and then leave me in peace. I know business doesn’t love me, but it would be awkward if it did. What I seek is common decency—and that’s what business almost always offers.

Despite its many virtues, business remains a go-to scapegoat.

You could reply, “I understand your admiration and gratitude for business. But why sympathy?” Simple: Despite its many virtues, business remains a go-to scapegoat. Yes, business leaders are rich, but we unjustly treat them like our moral inferiors. Until business has society’s respect, it has my sympathy.

Many will think me naive, but there are few more disillusioned than I am. I don’t believe that good or truth wins out in the end. I don’t believe in the American system of government. I don’t believe in the wisdom of the American people. I don’t believe in religion. I don’t believe in the media. I certainly don’t believe in our education system. I believe in my immediate family, my closest friends, my own ideas. And business. It’s not perfect, but it’s still nothing short of a miracle.

Reprinted from The Library of Economics and Liberty


  • Bryan Caplan is a professor of economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute, and blogger for EconLog. He is a member of the FEE Faculty Network.